Poultry News

Poultry Business Faces Tough Time Due to High Production Cost, Slowdown

28 April 2014

INDIA - Poultry business in Koramangla (in Bangalore) is undergoing a tough period with slow business and margins severely hit according to the players in the local industry.

High production cost, market fluctuations are some of the reasons holding the industry back and if this is not enough the long summers would further dent the business, according to The Economic Times.

TS Chitiyappa, owner of a Koramangla based Adi Shakti Poultry Farm, said, "The business has become very slow. The fluctuations in the market are proving to be even more damaging to the cause." Mr Chitiyappa is in the business for 32 years now. He said that there has been a drop in the sales by 10-15 per cent in the last six months.

He attributed the fall in sales also to inflation. "Cost of production has gone up drastically. Feed has become very expensive. Ther are not enough cold storages and they have a high cost attached to them. People are not ready to buy products be it egg or meat if the owner tries to pass the cost to the customers. So we have to compromise on the price and sell items at very low costs."

Mr Chitiyappa said that there is huge shortage of labour too.

Vishwanath, who is a partner in Arjay Hatcheries spoke on the fluctuation part. "The business is very volatile and we are dealing with open market that relies heavily on demand. Demand is not that great at present. There are only two ways of doing business. Either you go to the people or people come to you. If you go to the people they do business with you ontheir own terms or many times don't do, either."

He drew parallel with the stock market. "Karthik maas between January and February month is the time when people don't eat egg and meat due to religious reasons. Our business is not limited to Karnataka but we have supplies in Maharashtra and Tamil Nadu too. So everywhere there is an impact."

The misery just does not stop here, he pointed. "It's a 365 days business and we cannot stock eggs. The production gets spoilt in a big way as eggs are either broken or kept for so long that they become unsuitable for eating. So we have to throw them away."

Long summers will further increase the woes of the players according to Mohammad Hanif, owner of Firdaus Chicken Center. "The consumption will come down by 20-30 per cent." Hanif said that the company is two years old and has an annual turnover of Rs 8-10 lakhs.

Mr Chamaiyaah of Shree Chaamundeshwari Poultry also spoke about the intense competition in the industry. "There are a lot of hatcheries in Koramangla now. There are over 50 poultry farms within the area of 20 square kilometers. Particularly when the industry is not doing too well competition reduces margins even more."

He however pointed to a change that was taking place in the local industry. "The industry is going through a consolidation phase. Many small players are finding it prudent to merge into one to cut competition and production cost."